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NRG, ProLogis To Embark On $2.6 Billion Rooftop Solar Project

By Cassandra Sweet Of DOW JONES NEWSWIRES NRG Energy Inc. (NRG) and ProLogis Inc. (PLD) said Wednesday they are embarking on a four-year, $2.6 billion project to place solar panels on rooftops in 28 states, one of the most ambitious clean energy projects in recent years. The project is designed to generate about 733 megawatts, enough to serve more than 100,000 homes, the companies said. The installations will be built on facilities owned by ProLogis, a warehouse operator, and co-owned by NRG. The companies say the project will create roughly 10,000 construction, manufacturing and other jobs. The deal allows ProLogis, which owns 400 million square feet of warehouses across the U.S., to convert its rooftops into small power plants spread across the country. The companies plan to sell the solar power to utilities. The large size of the project "allows us to bring the price [of solar power] down, bring jobs to those areas and renewable energy resources to those states in a meaningful way," said Drew Torbin, head of renewable energy at ProLogis. Bank of America Corp.'s (BAC) Bank of America Merrill Lynch unit will provide $1.4 billion in loans for the project, the largest financing package assembled for a U.S. rooftop solar-power project, the companies said. The U.S. Energy Department has offered the companies a $1.4 billion loan guarantee to help finance the project. The financing is part of Bank of America's plan to put $20 billion of capital to work in renewable energy, conservation and other clean technologies that address climate change, said Jonathan Plowe, a BofA managing director who helped put the deal together. The companies will sign power purchase agreements with utilities and BofA Merrill will provide term debt financing and will obtain a credit rating on the debt, backed by the loan guarantee, in a financing structure that's new to the rooftop solar-power market. "It's an area that's been relatively fragmented and underserved by financial markets," Plowe said in an interview. "We think the innovative financial structure and world-class partners that are part of this [project] will help transform the solar market." Princeton, N.J.-based NRG, one of the largest U.S. power producers, will be the lead equity investor in the projects, said NRG Chief Financial Officer Christian Schade, although he declined to provide details on the amount the company plans to invest. NRG plans to start construction this summer on the first installation, a 15-megawatt rooftop solar-panel project in southern California that will provide electricity to Edison International's (EIX) electric utility. NRG, which operates a fleet of conventional power plants, also has a growing solar power business, primarily large solar farms. The company wanted to expand into rooftop solar power and was looking for something larger than the typical "one-off deals" when the project with ProLogis and Bank of America came along, Schade said. "This moves distributed generation to a new level," Schade said. Other projects are likely to be installed in Washington, Oregon, Nevada, Texas, Florida, New Jersey, North Carolina, Pennsylvania, Ohio, Colorado, Illinois, Wisconsin and other states, most of which have renewable energy requirements for utilities, said Torbin of ProLogis. -By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; cassandra.sweet@dowjones.com